California Chardonnay and an unlikely resurgence for Madeira helped Majestic Wine to increase UK sales over the Christmas period, but shoppers left it late and discounting was fiercer than expected.
- Majestic UK retail sales up by 1.5% over 10-week Christmas period; group sales up 6.3%
- Prosecco drives strong US sales at Naked Wines
- Profits on-track despite tough UK market
Sales of North American wines more than doubled at Majestic during the all-important 10 weeks to 31 December, said the retailer.
‘Unashamedly big, rich Chardonnay’ from California, plus Zinfandel and debuts for Washington State wines and Oregon Pinot Noir helped to drive growth, a Majestic spokesperson told Decanter.com.
There were also strong rises for English, German and Austrian wines and an unexpected 20% jump in Madeira sales, said Majestic, which saw UK retail sales increase by 1.5% versus the same period of 2017.
But, fierce discounting pressure on wine prices saw gross profit margin fall by 1.2% in the retail division. Despite this, Majestic said it was on track to meet pre-tax profits estimates for its financial year.
UK shoppers also left it late to buy wine, said Majestic, which saw a 47% jump in like-for-like sales in the week leading up to 25 December.
Majestic’s other divisions helped total group sales to rise by 6.3% for the 10-week period.
Fine wine division Lay & Wheeler saw sales rise by 5.3%.
Naked Wines’ gains in the US also stood out. Strong demand for Prosecco helped the US division increase sales by 21%, its best Christmas performance since launching in the market in 2012, said Majestic.
Majestic said it has been accelerating investment in Naked in the US.
In the UK, Naked Wines saw sales rise by around 12%, driven by rosé.
Much of the food and drink market analysis of Christmas 2018 in the UK has been devoted to the rising market share of discount retailers.
Nielsen data released this week showed that Aldi and Lidl were clear winners over Christmas and both increased their grocery market share.
Aldi reported record Christmas sales of almost £1 billion for December and said it sold more than 17 million bottles of wine, Champagne and Prosecco during the month.
Supermarket sales of beer, wine and spirits rose by around 3.8% in the 12 weeks to 29 December, said Nielsen, adding that consumers were more willing to shop around for deals.
It described Christmas grocery trading as ‘reasonable but not spectacular’.